The problem Detroit ran into was their own doing. For decades, they promoted cars that were faster with more horsepower as being superior. It is true that Americans want and buy big, powerful, fast cars. Mainly because that is what Detroit conditioned us to want. Fuel injectors were in use since the 1930’s, proven to be more reliable and efficient than carburetors. Most foreign companies were using them years before the Detroit trio did. Why? Because you could get more HP and torque from a carburetor on an otherwise equal engine. During the 1990’s, under Clinton and the Democrats, fuel economy actually decreased among automobiles. That’s about when the whole SUV thing really took off. We were buying and Detroit was making what we were buying (generally speaking). Then gas became expensive and people started to realize they did not need all that power on a daily basis. Detroit sold us a bill of goods and in return we bought the big expensive cars, now that bubble is over too. The only way to survive is for them to adapt, something they have been very slow to do over the past 30 years, and sacrifice, something the UAW has refused to do. While times were good, the UAW ran up labor costs to almost twice what other car makers had, and about 3 times what the average person made. Now that times are bad, the UAW wants to paint a picture that their members are destitute and poverty stricken. They all should have saved money from the good times to get them through the bad times. They didn’t and they won’t.
Ken, I appreciate your comments. However, let’s face it. There is no leadership at these failed companies.
There is no evidence they care about the strength of the company. The management and employees only care about enriching themselves.
The CEO’s told congress there is nothing wrong with their leadership. They blamed outside forces.
Why aren’t the rank and file demanding thir unions to work with management.
The big three only want to use the bailout to buy time. Then it’s business as usual till the funds run out (kind-of like a drug-addict).
I wish it was different. I wish the utopia existed. However, it has been 30 years since the Carter gas lines.
What have they done?
Toyota and Nissan went from being cheap, economical, gas saving, tinker-toy cars to first-class, gas saving vehicles.
Ford, Chrysler, and GM continue to develop poor quality, gas guzzlers.
How many times and how many ways do they need to be told their product suck? (Consumer Reports, other auto magazines, shrinking market share, previous chrysler bankruptcy)
I hope the big three auto companies keep this in mind:
“QUALITY IS NUMBER 1. Not just in words but in deed”.
I believe the american public would back them if the CEOs, management, unions, and workers made that first and foremost.
Otherwise, it’s just throwing good money after bad.
We have two obvious options here, each with its particular likely consequences.
To bail or not to bail; was that the question?
If we bail, we face the prospect of Big Three leaders regarding a bailout as a gift, a reward, even their just due. If this happens, the car makers go back to business as usual, and the bailout accomplishes nothing.
If we don’t bail, roughly three million jobs will be lost, and will have to be replaced. Additionally, the trend toward sending dollars offshore that we need in our communities will not only continue, but accelerate, in the absence of an American alternative. We’d have a very hard time avoiding the admission that we’d then be in a Depression.
So, we can bail, and fail, and we can not bail, and still fail. What was the question again?
What really has to be accomplished is to transform the American transportation infrastructure into a form more viable for the future. Cars are surely part of that future, but we have to make some decisions about what kinds of transportation we need, and, for that to happen, we need our leadership to take some forward-looking positions.
Once we choose the shape of the transportation infrastructure to come, the kinds of vehicles we need to go with that will sort of follow; until we make the first choices, there is no foundation from which to talk about vehicles, and vehicle makers can’t find their relevance, either.
People can argue forever about whether or not this situation demonstrates a failure of the market system, but that argument boils down to a discussion of what markets are, whet they’re good at, and what they’re not so good at. Once you understand the limitations of markets, you’d never even try to use them in a forward-thinking context.
Markets do a great job of asset allocation, they’re very effective at delivering products of known value to potential buyers, and, if they’re really competitive, they’re great at efficiency. Note, though, that nowhere on the list of things markets are good at does “leadership” appear.
One way of looking at markets is to say that they’re a concrete expression of our investment in the status quo. Because the value of the future, or of future products, is unknown, it’s very hard to value or trade future products in a market; it’s often been attempted, and it often ends badly. Markets con’t do everything, and they most especially can’t do leadership.
Getting back to the point, we need to reach a decision as to what the direction of transportation needs to be, and we ought to hire American companies to implement that direction. There are plenty of reasons it would make sense for the Big Three to be a part of that.
In the short run, we can’t really afford to eliminate all those jobs just now. In the long run, no good can come of leaving our strategic decisions to the vagaries of markets, because markets don’t do strategy. We have to make our leaders lead, and earn their pay for a change, and, after we choose our direction, let the markets come into play to help us get where we want to go.
Markets are great at certain things, but our Republican brothers have tried to persuade us that markets are repositories of wisdom, and that’s just a swindle.
Doug, nevermind the captain goes down with the ship.
Instead, it’s the captain and officer sail over to a yacht and watch the crew and passengers sink.
They’re a bunch of #$@! cowards and cheats.
Arriving in separate jets to BEG for money, Mgmt and UAW pay, and benefits are barometers of the company’s vitility! Who wants to throw good money after bad?
Give them your !#&* money and stay out of mines.
“…the government should demaind that the Big 3 terminate at least half of that unnecessary layer of management…”
What is an ‘unnecessary’ employee? Can you define that for me? Would you feel the same way if it were you who got the axe?
I am not saying that the big three aren’t without waste. Any company that has more than 20 people working for it probably has at least one useless employee.
Even the whole ‘cut CEO pay’ thing. I call this symbolism over substance. GM bled away $2 billion in Q3. Their CEO Rick Wagoner has a 2008 salary of just over $2 million.
Do you know what that means? It means that the CEO made just over $500,000 during Q3. Compare that to the $2 billion loss, and you are at one quarter of one tenth of a percent.
If you think the management needs to change as part of a bailout then fine, but this BS class warfare stuff is junk. It is counter productive. Just like griping about flying a corporate jet to DC.
I do recognize the power of symbolism though, and I think it was rather short-sighted of them to fly the way they did.
“…They fought against regulations to force them into building cars that get higher mileage…”
You people don’t get it. Detroit built big cars because that is what people were buying. It is a well known fact that the margins are higher on the SUV type vehicles. The big three NEED those margins because of their ‘healthcare for life’ gold packages that retirees are getting.
We wanted big, they are good at building big, we got what we wanted. No law or regulation forcing them to build 50 mpg cars would change that fact.
Did you ever see a smart car? I don’t care what gas costs, you couldn’t pay me to drive one of those on the freeway in the rain and wind. If you would have shown one of those to the American public five years ago, they would have balked at it. Oh… wait… They did how it five years ago, and we did balk at it.
Wow, I wish I somehow knew to buy Citigroup stock a couple days before it got bailed out. It must be good to have the timing of a Saudi Prince.
If bailouts are going to be the way it out to be the same for everyone looking for one.
AIG, Citi, Amex, JP Morgan, etc. should ALL be in front of Congress in the same fashion Detroit was. That’s where my problem lies. I don’t know that a $25 billion loan to the Big 3 is THE answer, but I know letting them fail and saying they’re horrible companies certainly is NOT.
People wanted trucks, they built them, get over it. If you didn’t want one you shouldn’t have bought, caveat emptor. We’re still sort of a free market.
I just don’t understand how America is OK with AIG getting $120+ billion untethered (and throws an executive junket on the taxpayers to boot). But somehow everyone has this huge problem with bailout out the ONLY major industry we have left. Logic seems to escape the American public and the US Government.
The Bloom is beginning to fall off the La Monica Rose, as in you are beginning to see the unfairness of Bailouts. We all can use a bailout. Let’s face it “CASH”. (where’s mine) However, some get it, others don’t. Worthiness does not matter.
THIS IS THE WILD, WILD WEST, BUDDY! Wake up and smell the coffee (in your cup).
It is all about GREED! Then as well as now. Nothing has change. These people are not good custodians of nothing. It is all about their own pockets. To He#! with everything else.
I am against all the bailouts. I have not seen one person or business that deserves it.
They only have to look in the mirror as to why they are in financial trouble. And when you look in the mirror you’ll see a big dollar sign on your face- GREED.
Consider this a Profile in Courage moment and take responsibility for yourself.
Washington, where fat cat politicians are still collecting their wages and benefits as usual. Once again, hard working Union workers are paying the taxes and getting nowhere with job security and wage increases. Once again the special interests of paper pushing bankers get priority over the working stiff. Talk about class war fare!!! I witnessed an airline asking for a loan to get out of trouble, and these politicians ignored their request and suggested they should fold their business. Yet the unions can not fully use their strike rights because the airline business is so critical. It all goes well for the heavy hand BIG BUSINESS TYPES to line their pockets. This country better wake up. The greed of the powerful is showing its ugly head.
There appear to be some intelligent, well thought-out comments here. I believe that the Big 3 Automakers have shot themselves in their collective feet. They fought against regulations to force them into building cars that get higher mileage and now come to the very same people they battled on that front to ask for money? Had they done as Toyota and Honda and others have done and shifted their focus to better built cars that are easier on the environment, they wouldn’t be in the mess they are today. I think the Federal Government ought to bail the automakers out, BUT Congress ought to say, “OK, now that we’ve given you billions of dollars, you have to start building more fuel efficient cars and you have to prove to us that you’re truly exploring alternative fuel vehicles. And you have to start today”. I think this is a good opportunity for the federal government to force the auto makers to begin acting in a socially responsible manner.
There is no reason to give money to the big 3. Let’s start with an issue that the media seems to be ignoring: the massive amount of upper management officals in all 3 automakers who are hauling down huge salaries in excess of $300K (plus perks). Before any money is offered, the government should demaind that the Big 3 terminate at least half of that unnecessary layer of management and cut the salaries of the rest. We should also question their “bonus” pay (for what, driving the companies into bankruptcy???). Let’s get real. Free enterprise should work in both directions, unfettered from government; no regulation and no bailouts.
We get the government we deserve.
If we individually want our pet industries to be bailed out then we are THE problem — becuase we think it is OK to take from our brother.
It is ironic — we didn’t leave the bill for our children we’ll pay it ourselves.
“Why Citigroup…” because it’s not about your job or house, it’s about you paying the bill now.
If it helps the banking industry then Detriot will be bailed out.
I have never seen a more ignorant grouip of people in thwe world that this forum. not one person ehre seems to have a understanding of anything at all , from the Ev-1 to current GM activities.
Ev-1 was killed because of people lying about leasing it( it was NEVER for sale , ever ). Consumers said nope its no good and didnt lease one ( 8% of made cars were leased. Blame the EV-1 on reality , gas was cheap , global warming was a myth still , people wanted a big HUMMER cause Arnold had one….
Gm can compete globally, in fact Gm does VERY well outside the US and is a benchmark for vehicle in parts of Europe and Asia. ( in China a Buick is the king of cars and has been for a while not Lexus , not Infinity , not Honda). The small diesel cars in europe are amazing , but the avg american wont settle for a 92 hp engine that gets 38 mpg unless it has toyota stamped on it for some reason.
Gm switched to global platforms in design before anyone else did using Holden and Opel (Toyota and Honda took this form of design FROM GM years ago. The busjiness m,odel you all applaud so highly was taken from GM , go figure.
GM produces MORE Alt fuel vehicles than anyone else and ALWAYS has. AND they dont lie about it for example …
The Prius used to advertise as 60 MPG , it reality it got 40-45 .. if GM did that you would all howl and foam at the mouth , Toyota does it and you dont care.
The new 2 mode Hydrid tech that GM is using is the top of the world to the point that BMW and Honda are interested in licensing it to use in their cars because its a better system ( yeah it took longer to come out but its better quality).
Gm put a fleet of hydrogen vehicles out last year way ahead of anyone else, not testing on a track, out in the real world used by volunteer people and their family.
They have put the Volt engine into a VUE making 11 of them that show promise to revolutionize The Crossover segment AND give you great gas mileage.
The issue with GM hasnt been cars its mis-informed opinion that GM generated in the 80’s adn early 90’s that peolpe are too hung up on, old out of date info , and to lazy to even go look.
Hell some GM pick -up trucks get better gas mileage than foreign SEDANS the mid size ones (corolla etc…).
Anyway as to a bail-out i dont think anyone should have gotten one but now that the box has been opened there really isnt a choice anymore , besides The democrats got ALOT of cash from the UAW and the Big 3 , they owe them favors they will get their bailout. This is all grandstanding by congress to impress the gullible masses of voters who cant really bother themselves to learn a simple fact or two and instead sit in ignorance with their only outdated data about GM , ford and chrysler they learned back in 1985 and never bothered to update.
Sad , the American people have always been and it seems continue to be their own worst enemy.
Reminds me of a saying from somewhere…
“Never underestimate the power of stupid people in large groups”.
The continued infusion of taxpayer money into the financial system, while necessary, should carry the same stipulations as those requested of the auto industry. The banks and other financial systems have lost more money over the last 9 months than the entire auto industry has made in years. This is an outcome of how banks have “made money” in recent years. So much of what they have made is based on valuations that are incorrectly, and possibly illegally, established. We must also ask what the banks have done with the money they’ve been given to date, credit markets haven’t loosened up and the financial institutions have used this time as an excuse to offer unreasonable interest rates and repayment terms. If we are to be successful in an economic recovery, the banks must participate and lead, just as they led us into this situation.
I have not heard a cogent argument – from even a fairly objective voice, let alone the fund managers, equities traders, or financial experts – against bailing out the big three which does not apply against bailing out the ‘too big to fail’ banks. True, the details of the business mistakes made may vary (the big three for years made the wrong cars, the big banks for years made the wrong loans, the big three maintained commitments to retirees instead of jetisoning them, the big banks maintained fat bonuses for executives in some cases even after bail out money arrived) but they both made substantial errors. Perhaps the strongest argument for the ‘bail-out’ is that of societal stability – if the banks fail, the economy will swoon; however, a similar argument can be made for the auto industry – if 10% America’s manufacturing base is allowed to fizzle away, the economy will also swoon. Unfortunately, in the latter case, the number of people affected will be significantly larger. To borrow a quip from Paul Krugman, we might as well help the poor (or blue collar worker) as such a small investment (3% of the financial bailout) will improve – or maintain – the quality of life for so many. As we are already throwing around tens and even hundreds of billions of dollars, why not help out in this way as well?
What a MESS! These gurus were paid millions to mess up the economy and now the Fed wants to bail them out for their gamble. What a joke. This mess is affecting far flung corners of the globe with world wide loss.
The government bail-out of Citigroup takes the financial crisis to a whole new level. It shows up banking incompetence and self-serving fraudulent behaviour that has led to this worldwide problem. The amount CEOs and the like are being paid, plus bonuses and incentives, is incomprehensible to the normal person in the street. No-one, and I repeat, NO-ONE is worth that sort of money. And what good are they doing for the community? These executives are nothing but self serving criminals who should forfeit their remunerations and any profit they have made in the last 18 months. There are many good and decent people in the world who would gladly serve the people.
What is this ‘off the books’ accounting? Why is it allowed?Do they have a bottom drawer for slush funds? This is too ridiculous to contemplate.
A bank should be the top echelon of accounting.
Off the books accounting is just plain fraud . . . a cover up.
. . . and now we all know what they were covering up . . . their own inefficiencies.
Yes, the government should be acting more quickly. There was a magazine article today on How Greed Killed Wall Street.
These guys were banking on profits they didn’t already have. Guess what? If All the Big 3 go under, that creates a monopoly. What do you think will happen with only two car companies remaining? This is Economics 101. It calls for increased demand, the price GOES UP. And you need to look at some of those tax cuts that the Alabama Senator got those foreign companies for his state. The stock market went down in Japan because all of the profits HERE GO TO JAPAN! OTHERWISE, OUR STOCK MARKET WOULD HAVE GONE DOWN MORE.
With all the manufacturing that has left the US for decades, service jobs don’t give the money to purchase good when prices go up.
Citi increased interest rates when all of these people are losing their jobs, and their houses. Where is their plan?
WHere IS the ANGER? The banks will fail if the big 3 go down, with all the businesses attached, and how many people will be defaulring into bandkruptcy, as the banks are still two months after the Lehman debacle sitting on all of that money.
The JAPANESE GOV”T has given their car companies money for years to retool and modernize. We haven’t. The US is the only country that plays by these crazy rules. Pushing paper jobs will disappear in droves when real manufacturing jobs are lost.
From an economics major who is scared to death of how our congress does not get it!!
The only part of Citigroup that should have been bailed out is the check-clearing section, a very small part of the company that could be independent. The rest of the company should go bankrupt and fail, because the business is simply not necessary, except to the over-compensated managers and executives.
Bail out the Big Three?
Automobiles are complex machines. You don’t see the geniuses Bill Gates, Warren Buffet, Steve Jobs, or Michael Dell manufacturing automobiles, do you? They are not smart enough.
Nor are any of the smart-alecks in the financial industries able to manufacture automobiles, or any of the analysts or reporters who criticize the Big Three.
Nor do you see big shot celebrities like Dr. Phil, Oprah, Howard Stern, or Mark Cuban (and other sports-team owners) manufacturing automobiles. So why do all these people have so much money?
They can all fork over some of their loot to help ‘bail out’ the Big Three – and if they don’t, perhaps their own customers should abandon them too.
———-
The Big Three got into a pickle because they made a lot of long-term contracts and when the market suddenly changed they are not able to cancel those contracts. Contracts like those cushy ones for the executives and for non-working past and present employees.
Bankruptcy means those contracts with non-essential parties get canceled. Means unused plants go idle or are sold to ‘investors’ who will try to operate them or salvage the guts of the buildings.
Years ago I was astounded that so many different car models existed; it’s expensive to have so many different product lines. The gossip rags and fashion industry – like Car and Driver magazine – really liked the variety but those days are over.
Meanwhile, automobiles have steadily become more reliable, and so the market has become saturated, even oversaturated. Why buy new when I can buy a used car that is only two years old? Oops, it’s a repo.
Retired people have less need of an automobile, they aren’t pounding it driving in rush hour traffic, so the market is shrinking, not growing.
Besides, one cause of obesity is the lack of exercise. People need to get off their butt, stay out of cars and walk around more.
A system almost any system requires money to function. If it fails all else fails.
We have motor transportation. It would be nice to have newer transportation, and most of all the every one that is a wage earner needs a job.
We already have pelnty of automobiles.
The American has been aware that the competition has been out selling them for at least 20 years.
Neither top management, nor labor did any thing to become more cmpetitive.
THEY ALL AHVE TO GIVE, BECOME MORE EFFICIENT AND LESS GREEDY.
For that they need to agree to a viable plan.
I DO NOT WANT A CENT OF MY MONEY GOING TO THEM UNTIL THIS HAPPENS!!
Bail out the Auto Industry? No Way!!
The big union’s have finally seen the effect of their greedy demands of the last three decades. It is not the current workers who cost the company so much, it is all those benefits demanded by the unions while the foreign companies were staying slim and trim.
Sure management has made horrible mistakes too. The accepted the union contracts instead of having a backbone, they treat themselves as royalty with their private jets, country club memeberships and big cars. They have destroyed the companies they lead.
It is too bad that the courts dismantled the DuPont/GM ownership status back in the fifties. DuPont is a well run company which probably could have kept GM from making so many disasterous mistakes.
Yes, letting the three auto makers fail will cause financial hardships and no I am not a “rich” person. I too am struggling to make my mortgage payments and feed my family. I do not, however, think the big three can be fixed at this point. I am very frustrated, however, that the government (you and I) will probably end up picking up the retirement costs of all these people through the tax dollars and the public benefit trust.
I don’t feel it would be nessesary to bail out the Auto Industry. They have had numerous occasions to turn their companies around, instead they decided to benefit themselves instead of the shareholders. Why must there be 7 different models with the same chassis and engine. Isn’t that a little extreame. This Country has Chapter 11 for a reason. Let them file for that 1st that’s what it is there for. If they are then unable to dig themselves out then they can prove to us that they attempted to use the filing efficiently. The banks should be under the same scrutiny. Instead of bailing out the banks why don’t they bail out the homeowners who can’t make their mortgage payments. Give the tax payers a 70 Billion dollar tax incentive. all that would go back to the economy to pay their mortgages and bills which would then have the banks be able to get bailed out.
Yeah right. I would just love my tax dollars spent on bailing out overpaid auto execs and union labor so they can continue to build junk that I don’t buy. I haven’t bought a US brand car in 20 years and every time I’m forced to rent one, I’m reminded why I’ll never buy one!
Bail out my 401K please and let Detroit find another line of work ‘cuz we don’t want what they make anyway!
I would not agree that it is “politically” easier to turn away the automakers than a bank. Detroit makes a tangible product. Citigroup is just a brand name for a set of services that is duplicated by a vast number of financial institutions. Perhaps we can’t let it fail simply because it has its fingers in everything; but if it is sold off in pieces once the market stabilizes, its employees and will just flow elsewhere. The automakers have to maintain much larger operations, and wherever they disappear they will be missed.
The government needs to abandon all practice of socialist props for PRIVATE industry. They made their bed they can sleep in it (with or without the fishes). How come Toyota and Honda have NO PROBLEM growing in the US? This hogwash with the banks and mega funds needs to be prohibited too, but the Congress needs their money to buy votes. Overall this is criminal. Where is the infusion of foreign government cash to prop up our banks? After all the debt forgiveness we have practiced over the decades, the least they could do is forive some of our debts in return.
I say the hell with CITI, they want our tax money, but now they want to rasie our interest rate on thier credit card to make more money. LET THEM FAIL!
No matter how much money you throw at Detroit, you’re only delaying the ineviatable. Why throw good money after bad? The numbers of cars purchased in the US will stay depressed for years to come and probably will NEVER recover to previous levels. No bailout will change that.
Fine, give ‘em $25 billion, they’ll be back for more in 6-12 month. It’s a bottomless pit, just like the banks.
All this shows is that politicians are willing to help their Ivy league buddies keep their white collar jobs. I’m sure Citi Group is still leasing their private jet. They’re in this mess because of bad decisions as well, but they didn’t have to come up with any viable business plan? Citi group got $20 billion no questions asked, but the Auto makers can’t get $25 billion split three ways? What a bunch of hypocrites.
The inability of some of the public to even grasp the mistakes GM made (such as the fact that the EV1 was introduced 1996, discontinued 1999, and crushed 2003 besides 300 miles per charge on modern NiMH batteries) with a propensity to hyperbole points to a deeper problem in civics and general history. Remember, it took regulation to put the catalytic converter, seat belts, and other safety devices into vehicles, not market self-interest.
Neither GM nor the banks deserve any bailout. Neither do underwater homeowners whom really bought what they couldn’t afford and that’s many taxpayers.
The pragmatic solution though is what will keep a 2nd Great Depression from hitting if you don’t want the USA to go into a dark ages for about a decade.
The spoiled complaining about their $300+ dollar per month gasoline bills really need to look at how badly they’re already mismanaging their own finances (the benchmark is 2000 miles driven a month should only cost ~$170 @ $3 per gallon). Then, project what happens when major institutions supporting their “extravagant” lifestyles go.
There are no collar wars since everybody had at least 16 years of decent prosperity under Clinton and Bush to put themselves in jobs that don’t hedge on the knife-edge of collapse.
It sure didn’t help driving up the national debt with all the warmongering. It turns out the true terrorists are ourselves.
last weekend i was looking at old exxon and phillips/conoco advertisements in national geographic mags from the late 70’s and early 80’s. it was a poignant moment because in their wordiness, they all shared the same exact message that is still spoken today…the need to become more energy independent, and the importance of developing alternative energies to replace oil and natural gas. funny funny…not funny. behind those now trendy “green” ads is a simple fact. why, if a company is making so much money on oil, would they change products, go into unfamiliar territory and risk substantial profit loss? those advertisements were and are nothing but sugar coatings to conceal a truth. the truth is, a monopoly will not change if it is making money on an existing product…the fact that 20+ years have gone by and we are still in the same predicament is proof enough.
this certainly pertains to the auto industry as well. 30 mpg is nothing new; you just don’t have to roll the window down yourself.
the part that leaves a sour taste in my mouth, as if the above “historical progress” doesn’t, is the government’s ignorance of laissez-faire, particularly with the auto industry. i cannot believe there isn’t more of an uproar from all the companies (start-ups or not), entrepreneurs and the like who are dedicated in creating mass marketable hybrid and clean cars. i feel bad for all the blue collar workers in the auto industry…at the same time, they must know maybe even more than those outside the industry, how necessary fuel efficient cars were/are.
we are all concerned about wages and job security, but social responsibility is out the window.
It is clear to me that most of the negative comments regarding a GM “bailout” here come from those who haven’t thought this through.
I can assure you that if the big three fail, or enter bankruptcy, there is no way you will not be affected; and those effects will be very, very negative regardless of where you live in this country.
I’m sure there’s little doubt in anyone’s mind that we are entering the most serious economic downturn since the Great Depression. At this point, the failure of any or all of the big three auto manufacturers, represents a shock that this economy cannot at present withstand.
In the current scheme of things, 25 billion is relatively small change. If it can provide the time needed by GM, Ford and Chrysler to restructure and retool, we must do it.
As a relative point of comparison, ask yourselves what benefit have you directly accrued from the financial bailouts to date? Then it might be beneficial to once again consider whether or not you can afford to be unemployed next year.
Let the big three founder, and chances are, you may well find out the answer.
“…GM FINALLY comes out with a hybrid and charges $40,000. The Prius is $25,000…”
The Chevy Volt is a plug-in hybrid which will get roughly 100 mpg. If you have a short commute (less than 20 miles) you may not need any gas. You also don’t know the price because GM hasn’t set it yet. $40,000 is assuming that the battery technology doesn’t get any ‘economies of scale’ or become cheaper as more and more companies compete to improve the technology.
The Prius gets about 45 mpg overall when driven like a typical driver. I also challenge you to buy a Prius right now for $25,000. They are going for a $3,000 to $5,000 premium.
When was the last time all of you Toyota andn Honda lovers actually drove an American car? Like you, I assumed they stank. I had a 1984 Dodge Omni and a 1990 Chevy Chevette.
I recently (6 months ago) drove a Chevy Malibu. I liked it so much, I traded in my 1993 Corolla (229 K miles) on it. I am telling you, this car is REALLY different.
It is a shame that they didn’t “get it” until now. It may be too late.
Is this America now.
To voice up for my generation, thanks. By all means please keep looking at the present status and propping it up so that there is no hope for me and mine.
Anyone who keeps throwing money at this fire is merely compounding the problems for future generations so that they can continue their lives in comfort. If this is pushed off to my generation I can honestly say that there are few that can take the weight, and those of us that can will choose not to.
That those with morals and ethics should stand idle as what they worked so hard for is stripped from them and their children to be awarded to the glutton and sloth is a crime.
To quote what both political parties used as their platforms, “change is coming.”
I like the idea of subsidising companies like Citi with more of my money. At least I know they are doing there bit to help ordinary Americans by raising interest rates on all credit cards and upping the late fees and cutting back on payment dates. To further help them we could give them some tax breaks maybe to incentivise outsourcing some more jobs to India perhaps.
Why have any strings attached to this taxpayer money, lets just make it a gift from us to them? It’s the least we could do for such fine upstanding Americans. My only fear is that Obama will remove some of the stuges from the DOJ and we won’t be able to have these fine monopolies of shareholder value any more…Merging Chrysler and GM will just give consumers more choice and more value just like it did for XM/Sirius.
“…if the Big Three go under, there are a dozen electric and alternative fuel car manufacturers in the wings just waiting for the opportunity to expand…”
You are kidding… right? If you think companies like Tesla motors could even come close to building one percent of the cars that the big three do, you are a little misguided.
Could they do it? If they had about 20 years, perhaps. The bankrupting and failure of the big three would create a HUGE void in our manufacturing capacity. Even if you asked Honda and Toyota to pick up the slack, it would take years to increase that capacity. Car prices will go through the roof.
Talk about taking care of Wall Street before Main Street. How does Paulsen hand Citi a check for $350 BILLION without so much as a peep from Sen Shelby as he continues to excoriate the Big 3, demanding a plan? We need to throw Shelby out on his thick skull and Paulsen out on his butt. I hope the fall of the Big 3 also takes out the car companies in Alabama subsidized by the government and America is left with no local manufacturers. I will laugh then cry as I stand in the bread line waiting for my Chinese donated food.
Giving the autos and any bank public money without taking an equity and controlling stake is insane. What needs to happen is that total debt must be reduced….that means equity is lost debt becomes equity and the total debt burden is reduced. What’s going on now is the screwing of taxpayers for the benefit of wall street. This whole situation has been screwed up from the beginning trying to keep people whole who should actually be losing their shirts for making insane decisions.
In theory, we all know bailing out the Big 3 is ridiculous. They should go bankrupt so that we can lose their executive staff. Giving them money will mean the same loser management team will continue to run them and not make the products America has wanted. If foreign car companies can be competitive in the US with the same advantages, Big 3 should have no problems. Especially since gas has been hiking for 2+ years now and they still haven’t figured it out.
Unfortunately, if we’re going to just hand 700billion to the financials, I think that means detroit deserves a piece of the action. But I like that we’re making them write a plan, de facto congressional management. A financial company’s profitability versus assets and liabilities are pretty obvious in today’s market. But if we’re going to hand money to a manufacturing company, we need to make sure they’ve actually figured out what it’s good for. We obviously can’t trust them to run their companies successfully on their own, they were doing poorly before the crash.
The big 3 are victims of the credit crisis and resulting economic downturn, more so than incurring any results of mismanagement. Even the Japanese
auto companies, without legacy expenses and with massive subsidies by states seeking to attract their jobs, are hurting from the dramatic sales slowdown.
The big 3 have been making very significant progress the last number of years, and are competitive overseas (where amazingly there is a more level playing field) . Yet too many commentators use arguments based on the 90’s
In summary, we’re jumping to aid the architects of the resulting credit crisis (in most cases without much choice, however unfortunately with sweetheart terms), but grandstanding where critical jobs are at stake with corporate victims of this crisis
WD, Chicago
I am amazed at how many people are misinformed here. First of all we all acknowledge that the automobile industry needs to change. They need to get back the ability to manage their business and I beleive the UAW understands that fact. This is not a bailout it is a bridge loan to get them through a tough period. There will be much blood letting still in the industry even if they get the money. I find it absolutely outrageous that trillions of dollars are being thrown at the financial industry to “friends of Hank” to allow them to acquire other banks and remain in business. Why didn’t we allow some of those people go bankrupt? There are certainly a lot of healthy banks that could have merged with these guys and restructured the industry. Do you honestly think you are going to get some of the majority of that 3 trillion back? Here we have an industry that consists of just 3 and is responsible for 3 million jobs in our country where a lot of hard working people actually produce something being told to go pound sand. We sure have our priorities straight don’t we. As for the auto industry quality, in case you didn’t know, of the 18 models surveyed J.D. Powers in 2008 they listed 9 Asian models in the top and 7 were domestic. Which was the the highest intial quality in the midsized category 2008? Chevy Malibu. European nameplates only garnered two, both Mercedes. You think after spending all of that money on high priced European nameplates that people would expexct better quality. Perception sometimes becomes reality unfortunately. We need to be producing things in this country!!! We can’t all work for the service industry.
No, the government is doing the right thing my asking questions.
The big oil companies have lots of money. And their success is tied to the car & truck manufacturers.
Why don’t the oil companies bail out the car companies?
“…it seems to me like a laundry list of Bush and Paulson friends that are getting the money…”
Do you even know this? Tell me right now who got the money? Give me names, addresses, amounts. You are so full of it qouting that same partisan BS.
Before you go flaming me, I think we should loan money to the big three with some strings attached. I just can’t stand to see people who think that the Democrats don’t have any crooks in their party.
Just an FYI… America and American should be capitalized.
It makes me nauseous that the very people who cause the mess are getting handed money left and right without supervision or apparent forethought. They are not even making any loans to keep the economy that they created. They had to be dragged kicking and screaming to modify the bad loans they gave out in the first place.
What I cant understand is how no one seems bothered by having a “debt based economy.” What are we, a bunch of Ferengi from Star Trek? It is disgusting and disturbing and painful to see our last major manufacturers get the cold shoulder why the Robber Barons get hand outs. I seriously hope that someone else out there cares enough to demand better for our country too. When the economy loses millions of jobs including mine as a supplier to a supplier, it will be those who made these greedy decisions we come looking for. Thanks for nothing. Rich bankers keep their condos in New York and the rest of us go homeless. Nice.
What amazes me is that the Politian’s have no problem taking jabs at corporations for mismanaging their money – have they looked at our national debt lately! They have no idea how to manage a budget or cut back where it hurts. They are still funding whatever they promised to the lobbyist who put them in power. How many have taken a pay cut so that their district can afford more teachers or policeman? They are worried about how the big three arrived while driving up in their private TAXPAYER financed limos! They talk about the big three like the workers and the dealers have had any say in how their money was spent. The American people have to hold Congress accountable for their terrible decisions. It is time for them to get off this pedestal they have put themselves on to and take some of the blame for the mess this county is in!
Maybe… if we let Ford, GM, and Chrystler fail… we can ask Japan and Germany to just build our tanks for us. Why not since most of the parts are made there.
If we can save a bank, we can save the big three. Normally, I am a die-hard capitalist, but we opened the door to this.
Don’t give me this BS about the financial industry or banks being ‘more important’ than the auto industry. You know who says stuff like that??? Bankers.
Too big to fail? – This is very scary proposition. What it means that these “big” companies can fail miserable as businesses, be looted by insiders (and by insiders I mean not only upper management but employees also), but still be bailed out. So there is no any responsibility in behavior. If this is our idea of market economy, then just nationalize all the “Big” companies. I think we must not allow any single company to grow in such a size that it collapse will drag the whole country down. Especially it must be done for banks. With smart use of technology the small and medium size banks can be as efficient as the big ones.
It infuriates me that Washington continues to freely give money to Wall Street, but nothing to Detroit. It is so unfair. So many jobs are at stake and once again, no one in Washington or New York cares about manufacturing. I’m sorry, but you can’t be a country that manufactures nothing and only consumes and serves. Save American jobs – now.
Malfeasance, incompetence and fraud should not be rewarded, no matter what the industry. The banking industry or any individual financial institution is no more or no less important to the health of the US ecomony than the Auto industy, the Energy industry or other manufacturing. The only exception may be the Agriculture sector because, without food to eat, it is all a moot point! Fairness demands equal opportunity and equal treatment for all.
What’s happening now is the long term effect of short term management thinking.
I think bailouts for *anyone* is a bad idea, including Citibank. We are just prolonging the inevitable with these bailouts by leaving the same people who caused this mess in control of vast pools of capital and power. Let them go under and let better businesses take the business.
Wells Fargo hasn’t had any financial issues. There are a lot of other profitable banks that didn’t give into the bubble psychology. Why should these banks be punished for making good long term decisions while sacrificing immediate bubble profits?
What the government is saying to business, right now, is “make as much profit during bubbles as you can and we’ll bail you out when the crash comes.” The government is already sowing the seeds of the next bubble.
As far as the auto industry, if the Big Three go under, there are a dozen electric and alternative fuel car manufacturers in the wings just waiting for the opportunity to expand. Right now, they are being stifled by the Big Three’s capital requirements and their intense lobbying efforts against competition.
Letting bad companies go out of business is very painful, but it is a necessary part of innovation.
Someone will buy Chevy. Someone will buy Jeep. Someone will buy Ford. These brands have value. The management and unions that caused the issues will be gone and the companies will be able to be competitive.
Give the bailout money to the average citizens so they can ride out the painful transition, not the companies.
$7.7 trillion, which are the current obligations for these bailouts, is enough to give every taxpayer and business almost 3 “no-tax” years. If people didn’t have to pay income or business taxes for 3 years, what would that do for the economy?
These bailouts are just subsidizing compulsive gamblers who can’t pull themselves away from the blackjack table.
“…They did kill their own produced electric car with prejudice recently”
Recently??? Are you kidding??? They killed the ev1 back in 1992/1993. Only tree huggers in California who may enjoy paing $600 a month for a car that can only travel 25 miles on a charge would ever pay for such a piece of junk.
The truth is that GM if FINALLY dong things right, and they have been so for the last two years. They have the re-negotiated labor deals, pension funding agreements, slimmed down workforce, reduced product lines, and the Chevy Volt which has the potential to be a real game-changer. They even started to make HUGE gains in quality such as with the Malibu.
The problem is that all of this may be too late.
Try this angle; The US got out ot the oil business in the 40’s and 50’s let the cheaper “Middle East” Countries take it over.
How’s that working out for YAH????
Now it appears that those who understand history so well are saying, “let’s repaet it in the car business cause yah know it’s different than oil.”
For those who have not evolved from the “payment plan” for cars yet; Detroit has been $1,000’s cheaper for a mid-sized car. So go ahead make your 60 or 72 payments to Japan – I choose not to.
Should “we” help…NO!! GM FINALLY comes out with a hybrid and charges $40,000. The Prius is $25,000. GM’s average compensation package is $73/hr. Toyota’s is $48/hr. Duh!!! Maybe we should give their bailout money to all the suppliers who will be left holding the bag.
Banks are bailed out because they basically employ a white-collar, college-educated, fraternity/sorority
workforce. These guys and dolls went to the same schools as the government guys and dolls who are bailing them out.
Automakers basically employ a blue-collar,trade school-educated, neighbor hood workforce. The people that the guys and dolls look down on and despise as cretins because they don’t care about the difference between a
Chenin Blanc and a Sauvignon Blanc.
So if any gets marched off to the financial death camp it does not take a genius to figure out who gets gassed and who doesn’t.
NO to bailing out Detroit. They had their chances to fix their problems since the 70’s, but they continued to run on the same idiotic ideas and crank out sub-par vehicles. Greed is what got them here, with them selling their gas guzzling SUVs and rental-lot-filling cars.
I live in michigan, and I just closed all my accounts (savings, credit card) with Citi. I’m going to pursue either paying my mortgage off early or refinancing it elsewhere…so they don’t get one extra dime of interest.
Obama is correct, it is urgent we get consumer confidence restored. The automakers have become the current segment to stone, and although they seemed cluelessly arrogant last week, we must find a way to ensure constant employment for the auto workers.
The people who made the most profit from the “Big Three” were the UAW and the CEO’s. They bled these companies dry… let THEM bail out their companies. The same argument could apply to banks I suppose, they don’t, in my opinion, deserve a reward for their screw-ups. Alas, they have Paulson in their corner though.
How is it that my job at GM has caused the mortgage meltdown,the financial freefall and the credit crunch? The banks get a blank check and the Big 3 have to beg with hat in hand.There are millions of jobs on mainstreet USA at stake here,people.
NO to bailout of Detroit. The private jet ride, and refusal of unions to offer their pension money to bail out Detroit, or of management to offer to cap their income, or invest their deferred comp monies into the companies, shows an arrogance I have no desire in supporting.
They’ve had numerous chances to fix the problems in 30 plus years. They had nice high salaries and benefits for years – now they should bear the consequences of those choices.
Why bail our Citigroup and not Detroit? The answer is obvious. This is class warfare at its best. Bankers get bailed out while blue collar jobs are sacrificed. Its frankly ludicrous to suggest that banks in trouble from foolish speculation are more important than large industrial companies that provide provide products people actually use and sustain millions of jobs in the process. But those bankers are part of the New York-Washington axis that is looting the rest of the country to pay for its own foolishness.
NO! They should be on the green wagon! When will these big corporations start realizing they can do just as well if they build what they people want and promote their future in saving what resources we still have left and give our children a better future and hope!
GM,Ford and Chrysler are all successful overseas under different names. If the jobs are to continue then they must rebrand, get rid of the bad reputations and start building cars people want to buy.
Let’s just bailout everybody. Send a $1 million check to every man, woman, child, fraudster, thief and scam artist and be done with it.
But really, we have way too many banks that produce nothing but toxic assets. Now would be an excellent time to thin the herd. Same goes for Detroit that has been building junk for the last 40 years.
Maybe we should quit trying to sustain the unstainable and instead start investing into the future. Alternative energy, energy infrastructure, electric trains, health care, research, education. Let the banking & auto sector fail, we’ll be better off without them. All we’re doing is delaying the inevitable and bankrupting the nation in the process.
Yes, it should. The Big Three are ‘uncompetitive’ because the Japanese automakers offer no pensions or health care. In Japan, the government pays for them; in America, the workers pay for them.
Likewise, if we brought in a big Japanese bank (any one of them is better run than AIG, Citi, Lehman, Merrill, etc. with their bloated pay packages), we could then let Citi fail with little consequence … just like GM. The Japanese competitors would just step in and pick up the business with their lower cost structure.
So, if the government acts quickly to save Citi (which produces nothing), then it should act quickly to save the Big Three, even if it means converting them into the Big One (run by Ford) with a lower, Japanese cost structure. Stop playing favorite industries (maybe Paulson is trying to get a job on Wall Street ?); save them all or let them all fail.
For the guy who wanted to know the total the Government has committed so far…..it is 7.7 Trillion Dollars…
http://www.bloomberg.com/apps/news?pid=20601109&sid=arEE1iClqDrk&refer=home
This country has become a country of financial services, e.g. the rich loaning the poor money and all buying on credit and surviving on credit. Even Sears which derives 75% of all its profits from financing what it sell. This whole scheme seems very wrong. Where is the “real” economy? Financial managers are at the top of the all of industries pay scales with bonuses that are at scandalously high levels. All this for shuffeling financial paper while companies that create real things that are usable and exportable get nothing. However, the UAW does need to recognize the realities of the competitive workforce and that their days are over. That said… every finanical company that gets a bail out would otherwise be bankrupt… there should be NO bonuses to any of the them at any level and they should all gladly and happily take a 25% pay cut and be glad to still have their job and their employer surviving.
imo some if not many of the problems of the automakers are made in Washington.
Gas prices soared last summer because our nation lacks an energy policy aside from “don’t build it here”. Then Washington had the gall to practically outlaw [via jumping the fuel economy standards some 60%] the most profitable vehicles Detroit makes.
Now that’s arrogance — first you foul up big time and then you make the victims into the scapegoats so you don’t have to acknowledge that you’re at fault.
On the other hand, the UAW and the automakers were positively stupid to continue with their hugely overpaid employees.
So I think that the government should throw in about $50 billion in compensation to the automakers for incompetent management of the economy, after which the automakers should file for bankruptcy to shed the never possible union contracts.
Yes — union “retirees” will be hurt. Unfortunately, when someone “retires” at age 51 with full lifetime health care and an 80% pension, he isn’t part of making America stronger and better off — what he’s doing is slacking off and the economy can and should punish slackers.
Again… this is not a proposed bailout of the Big Auto company’s, GM and Ford. It is a bailout of the Auto worker’s union. There are still vehicles being made in this country, and there will still be jobs for skilled labor. But these companies cannot compete with the anchor of the unions hanging around their necks. They do not need to be paying 70$ an hour for a guy to stand on the line and screw in a couple bolts… Want to save these companies ? GET RID OF THE UNIONS! Plain and simple.
We shouldn’t save GM whom had every chance to diversify and improve their products with an eye on the future.
They did kill their own produced electric car with prejudice recently, they killed the electric trolley systems in Los Angeles, they jumped on the SUV/Hummer stupidity instead of bringing over their smaller vehicles made by Opal, and continued the Hydrogen car fantasy with Bush.
Capitalism demands they shutdown for their mistakes since they couldn’t even manage to stretch out their tendrils into the basic fabric of modern life as the banks have.
Really, you look at how the banks and AIG are spending their bailout money; on perks, bonuses and dividends it makes no sense not to give Detroit a break. It seems like a typical case of everything for Wall Street and nothing for main street. They wrote Paulson a blank check without grilling him or the banks about a business plan. Why the double standard? Now the banks won’t release the money for about another year or so, which won’t help the car companies, or the retailers or average Americans. These deals stink to high heaven.
All that is happening is that we are rewarding the failure of the bank and insurance companies’ managements’ failure to exercise due diligence.
The unfairness of it all makes me sick.
I don’t think the general public realizes what the effect of one of the big three going under will have on a local level. Think about when you are driving in to work, how many GM Dealerships you pass, the number of people they employ (about 100-150 on average per dealer) and what would happen if the go under. The loss of local income tax dollars, the increase in unemployment benefits etc. And i swear if I hear one more person say that the Big three need to reorg to mirror Honda or Toyota I am gonna flip. Does anyone realize that Honda is having it’s worst year EVER? Sales down 26% Nearing the levels down of what GM is? Or that GM didn’t make the SUV bigger without the public buying them? A perfect example is the Explorer….look at the first model that was released, and compare it to the current generation. Would any company build a product that the consumer wasn’t buying? Never mind that the Explorer is the number on in SUV sales in the country, and the F150 is the number one selling vehicle not just for Ford, but in most markets across the country the number one selling vehicle PERIOD. The saddest thing is that people don’t realize that GM got caught in a perfect storm. First, start with banks making risky loans and having it catch up with them, so all the banking institutions tighten their cheeks and stop lending to anyone shy of perfect credit. Strike one to the big three. Then add in gas prices soaring, again which th eautomakers have nothing to control. Strike number 2. Then throw in the negative press detroit gets from people who know nothing about the automotive industry that Detroit creates inferior product, despite the fact that for example the Ford Fusion is equal to the Camry and Accord in initial quality studies. Strike 3. And for some reason, it is lost that Detroit is NOT asking for a bailout, like all the banks are. Detroit is askng for LOANS, in order to survive long enough to complete the reorganizations the companies have already started. I will be the first to admit that I am a republican, and ABSOLUTELY DISGUSTED that other republicans are unwilling to help an industry that built our country (Hello anyone? Lets remember that Ford invented the assemply line?) and made us the economic powerhouse that we are. It will be a sad day when out countries one and only industry will be to hold and move money. We will be the modern Switzerland. Oh wait…the Swiss have chocolate and cheese…..
Gentlemen, I think we are all getting it wrong around the world (I am writing from Spain).
We are looking after the financial industry as if we need finance. Well, if the finance industry is sound and viable, better for all of us. But what we certainly need is credit, and that is a bit different from finance.
We have the financial industry as a whole in a mess, but what we need back is credit and to recover the effectiveness of a monetary policy currently un-linked to economics due to the creepy financial industry.
We must find a way to regain credit and monetary policy in spite or by-passing the current finance industry so that if it has to fail… let it fail without carrying the rest of the world with them
Allowing GM to fail would mean financial ruin for many small business who supply GM. Bankruptcy would force GM to resturcture and probably help their ability to decrease pension and benefits to the unions for current and retired workers, but it would also force their suppliers out of business. Suppliers are unsecured creditors who generally get nothing in bankruptcy. Many of GM’s suppliers have GM as their only customer. If GM stops paying them, they go out of business and the jobs are lost. Additionally, GM has assembly plants. They do not make the majority of the parts. If their suppliers loose in bankruptcy, there is no one to supply the parts once they emerge from bankruptcy. Losing GM is minor compared to what it would cost companies across the midwest who supply GM. They are asking for a loan, not a handout. Chrysler had a federal loan in the late 70’s which helped to make them a profitable company through the 90’s.
Citi was bailed out because certain politicians, family, and W.H members are large beneficiaries of their bailout. And the media and gov’t spokespeople should be saying taxpayers bailout not gov’t bailout. government no longer means the people since we have no say in this taxpayer heist
My hard earned money that I’ve invested has no government support or backing. Yet “Detroit” makes major market errors and “the gov’t” is supposed to bail them out? Uh, “the gov’t” is your and my taxdollars. I’m not an insurance company, and besides, if I have no say how my money is spent, thank you, don’t spend it. Detroit took itself out. The gov’t is smart demanding a plan of action. This investment is critically high risk, so why take it? Their past performance only proves they’ll toss the $25B too.
Acting more quickly you say? I canonly assume that yours is a rhetorical question…
Perhpas you ought to ask the MILLIONS of people who will be out of work what they think of the preferential treatment. More insulting, if/when the Midwest finds new jobs they will then have the disticnt honor of paying for CEO greed for the next 100 years. Paulson proves that It DOES MATTER WHO YOU KNOW in this world.
Everyone has their own perspective and Wall Street can’t imagine a world without themselves on the top. The rest of us dream of such a world.
I’m from Michigan and let me just say that I am absolutely repulsed at the fact that there are so many voices in congress and the business community acting like the entire Midwest doesn’t matter. When did we sink so low as a nation that we think nothing of taking entire states off the map and not even think twice about it? Michigan created the middle class and won World War 2 – you would think that would be enough to gain the state a little more respect during this challenging time but apparently not.
Yes Detroit has made its mistakes but handing over money does not mean those mistakes are then endorsed. What it does mean is that the government can come in and make the changes it needs to while still preserving jobs and infrastructure. And the whole “To let them continue would be to endorse a failed business model.” Argument holds ZERO weight when you consider that the government is buying into all these toxic mortgage assets. Is that not buying into a bad business model? The government can buy a trillion dollars of mortgages that will never be repaid but it cant buy a few months for and industry to get back on its feet? Crazy.
The current managements, including the current board of directors, are both arrogant and incompetent. The UAW contract is non-competitive. No money should be advanced until there is a full scale house cleaning and a new labor contract. Bankruptcy may be necessary as a first step.
The Big three need to restructure along the lines of Toyota and Honda. One car line from very fuel efficient to Luxury. Having several different car lines is very inefficent and not cost effective for the future of the Big Three. Giving them more money without significant restructuring would be throwing money down the “sewer” of inefficiency.
..yes gov. should let the big “institution” fall. We can’t reward huge merger and acquisitions…known as monopolies….there is a logical reason for the antitrust laws on the books…it suppose to protect business, and fair competition that leads to better ecoomic conditions. Big enterprise comit big errors…small companies comit small errors
The financial industry is the backbone of the economy and needs federal injections. I don’t like it, but it must be done.
GM should go bankrupt. Far too long they have made terrible vehicles that are nowhere close to competing on a global stage with Honda and Toyota. Developing economies and markets are where the money is… do you think they are going to want huge SUVS and Hummers?
$25 Billion to GM would only keep their liquidity afloat for 5 MONTHS!!!! Do you really think GM will miraculously become profitable and start making good cars that can sell in the global market in 5 months?… NO! GM should declare bankruptcy, sell off assets, restructure, change their old ways,change their horrendous management that has accomplished nothing and flies private jets to washington (good PR move, nice marketing GM…idiots), and the UAW has to realize that they are a part of the problem too.
The American market is oversaturated with vehicles, GM needs to compete GLOBALLY for god sake! It is simple economics! How can you compete globally with insanely high pensions and wages!?!?!? Cost of goods sold needs to go down so you can have a high gross margin and compete globally. GM Management and UAW refuses to believe this.
I am starting to lose faith in American business. When will companies return back to simple economics, business 101, and stop being greedy. When they do, expect prosperity.
Typical. Screw the car companies and keep shovling more money to those criminals. Meanwhile Bush, Paulsen, and a number of republican Senators keep doling it out to Wallstreet. It’s so obvious what is happening. Where did Paulsen work before — hmmmm let me guess. And ever since Bush made the comment that Detroit needs to build “relevant” vehicles I knew right there the idustry is screwed. Pssst — Mr. Bush cars and trucks use oil – that in itself should be a motivator for you. Can’t wait for you and the rest to move on – can’t be soon enough.
Should they be bailed out? No! they have been building junk for over fifty years in my opinion and it time for a wake up call.
Yes they should considering the government contributed to the problem over the past two decades with unfair trade policies where foreign automakers were allowed unlimited access to our markets, while our automakers were only allowed a few thousand sales in foreign countries, the NAFTA, and WTO policies are disasters. In addition, we have endured decades of mismanagement in Congress, it’s ironic for them to interrogate CEO’s when they have been blundering about for decades without a clue. It’s a case of class warfare. They take care of their own and the little people (ordinary, average workers) are left to fend from themselves. There are no more free markets, it’s only an illusion the eliteists hope to keep perpetuating.
Yeah, why not? The collapse of big banks was due to lax regulation by Big Gov. and now legislators are making mainstreet pay for this oversight. The Big 3 are in this predicament because of the collapse of credit due to the reason mentioned above.
Let’s be capitalists and let both Citi and GM fail. Stronger better managed companies would thrive in the post apocalyptic world.
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Wake up!!! The government made the mess in the first place you think they can fix it. Nobody should get a bail out!!! I have been reading the message board for days trying to get a feel for the public’s opinion. You know what they say about opinions, well it is true. The facts are everything was done legal. This means businesses stayed within the confines of the law. This cycle will happen again!!!!!! How do we fix it repel all the law/policies of the last two decades especially the law that broke down the barriers between banks, investment firms, and insurance companies.